RBI Plans Continuous Cheque Clearing Instead of Batches
Why in the news
The Reserve Bank of India unveiled a plan to move from batch processing under the Cheque Truncation System (CTS) to continuous clearing, for faster settlement and better service.
Old versus new
| Aspect | Current CTS | Continuous clearing |
|---|---|---|
| Method | Batches in scheduled sessions | Scan, present and process through the day |
| Timing | T+1 cycle (up to 2 working days) | Business hours, 10 AM – 4 PM |
| Clearing time | A day or more | A few hours, same day |
| Confirmation | Within the batch cycle | Real-time positive/negative reply from drawee bank |
After settlement
- The clearing house passes results to the presenting bank.
- Money reaches customers immediately and within 1 hour at most.
Objectives
- Quicker clearing, closer to digital payments.
- Lower settlement risk.
- Better operational efficiency for banks and convenience for customers.
Exam angle
- System being replaced: batch-based CTS; new model: continuous clearing.
- Window: 10 AM to 4 PM; fund release: within 1 hour of settlement.